3 ms·
did you have a chance to check out the nber article i linked to at the top? it does a deep dive on construction costs and land economics. here is the direct lin
by krausejj 9y ago
did you have a chance to check out the nber article i linked to at the top? it does a deep dive on construction costs and land economics. here is the direct link: http://www.nber.org/papers/w8835 http://www.nber.org/papers/w8835 (it is a super interesting read, even if you just read the intro)
i too am skeptical of magical fix-all solutions, but I actually believe this could be a silver bullet. many of the issues you describe are circular—construction costs are high because labor is expensive because housing is expensive... the root cause is that california has stifled supply.
- prostoalex 9y agoI guess I am kinda agreeing with the thesis - I am observing that “marginal, physical costs of new construction” is not as low as people expect it to be. Downtown SJ is another good example - they zone pretty much anything, the debate in the local papers is whether developers deserved tax breaks, not whether the zoning decision was right. Prices are below SF and PA for sure, but we’re still not seeing dramatic drops. There’s some $/sq.ft. floor that developers in SJ and LA are not able to breach even when all regulations are fast-tracked.
- krausejj 9y agoi believe that's because the bay area's housing costs are set by bay area labor costs, which are extremely high due to high housing costs, so even if San Jose is building (which, per capita, it's doing just as badly as other california cities, fyi), it will still be screwed by the regional issue